The winner in this year’s Bonds above £750m category is pest control and hygiene services provider Rentokil Initial, with its £1.628bn EUR/GBP currency, multi-tranche bond issuance to pre-fund its acquisition of US extermination specialist Terminix. The transaction was structured as a multi-tranche benchmark €850m five-year, €600m eight-year and £400m 10-year bond transaction.
Following positive and constructive investor feedback from a virtual roadshow, Rentokil launched the bonds on 20 June 2022. The feedback had indicated a strong demand from investors who had cash to deploy, but also showed the need to be nimble and identify an opportunity amid the extreme volatility present in the market at the time.
However, the single biggest strategic influence of the team was to ensure that Rentokil had the flexibility to look at both the pre- and post-summer issuance windows. In the end, a window appeared in June and Rentokil strategically decided to de-risk the bridge refinancing by making use of the bond issuance window.
The bookbuilding process had a strong start – the EUR books grew quickly to €3.5bn+ with the GBP book at £850m+. When the books peaked above €5bn for the euro tranches and £1.35bn for the GBP tranche, the company communicated to the market its decision to upsize all tranches to €850m/€600m/£400m.
Rentokil’s deal execution team had a strong positive impact on the transaction success: the team was very pro-active and challenged its bookrunners to ensure that the best traction during the roadshow phase of the transaction was achieved. They also showed strong involvement while monitoring the market day by day. All of this evidenced a strong understanding of the markets and a subsequent level of trust in the bookrunners appointed.
SEB was involved as Active Bookrunner in the transaction on all tranches. Other active bookrunners included Bank of China, Barclays, Bank of America, HSBC, Santander, ING and Wells Fargo Securities.
“This was a well-timed, oversubscribed issuance that reopened the EUR and GBP markets during a period of high volatility. A very pro-active deal execution team ensured they got the job done.”